Investors hope the sporting-goods maker will score when it issues its fiscal fourth-quarter results after the market closes on Thursday. Nike shares rose almost 1%.

Nike.com

Nike’s $160 Flyknit Lunar1+

Sentiment is mixed, with several analysts arguing that the company’s current valuation already factors in any potential upside.

“We remain on the sidelines as we see no catalysts for further price appreciation,” said Sterne Agee analyst Sam Poser, adding the stock is trading above its historical average.

He added that Nike China sales are expected to drop over the next two quarters as the company corrects oversupply of inventory on some key items. He said Nike’s top rival, Adidas, is taking market share in China and “coming close” to taking Nike’s leadership position.

“China’s sportswear market is likely to remain challenged,” Credit Suisse analyst Christian Buss said, adding local Chinese sneaker companies such as Anta have seen product order declines of at least 10% for the December period.

Meanwhile, in North America, demand for Jordan and other basketball sneakers is expected to continue to drive demand.

Running shoes, growth of which had slowed, would also show improving signs, analysts said. However, Canaccord Genuity’s analyst Camilo Lyon pointed to the new $160 Flyknit Lunar 1+ running line that features Nike’s new seamless and cushion technology that may be “pressing the limits of consumer demand.”

Western Europe, one of Nike’s weakest performing regions the past two years, should start to see stabilization and rebound in profit the next 12-18 months, Buss said.

Other analysts said they want to hear more about the latest management reshuffle, including the retirement of Charlie Denson, president of its namesake brand.

“We are certainly sorry to see” Denson go, Landes said. “However, the breadth and depth of NKE’s executive team gives us confidence that there are plenty of champions of the brand who can preserve its DNA.”

On the spending front, Nike should see lower marketing expenses since it didn’t have spending tied to last year’s launch of NFL apparel, FuelBand workout tracking device, European Football Championship and the Olympics.

Story Conversation

About Behind the Storefront

Behind the Storefront is a blog about all things retail. It’s aimed at investors, shoppers and anyone else with a passion for learning about what drives consumer behavior. Hosted by Andria Cheng, Behind the Storefront will cover the business, brands and shopping behavior that’s behind some of the biggest companies, and largest employers, in the world. You can reach Andria at Acheng@marketwatch.com.